Maui Economic Outlook Positive Despite “Sputtering” Tourism
By Wendy Osher
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KAHULUI – The economic outlook for Maui remains positive despite a slowing tourism boom and a the lack of an anticipated construction rebound to make up for it–that according to Dr. Jack Suyderhoud, First Hawaiian Bank economics adviser who spoke at the company’s 40th Annual Maui Business Outlook Forum, held Thursday morning at the Maui Beach Hotel in Kahului.
Suyderhoud, who is also a professor of business economics at the Shidler School of Business at the University of Hawaiʻi Mānoa, said “there are reasons for hope on Maui as job creation continues and the real estate market remains firm.”
Suyderhoud said that while recovery continues, it has not been consistent and he used the word “choppy” as a “watchword” to describe what kind of conditions Maui might expect for the next year.
The choppiness was cited in arrivals to Maui in the first three months of the year, which showed negative growth, followed by good April and May numbers.
Visitor spending on Maui remains above the statewide average, helping to compensate for the ups and downs of arrivals.
He said price competition could be created by the new room inventory at the Andaz at Wailea, Montage at Kapalua and Westin’s $60 million renovations at Kāʻanapali.
On the upside, Suyderhoud said “locally focused retailing remains positive and the commitment of airlines to provide more seat capacity is encouraging.”
He pointed towards the addition of two daily flights between Los Angeles and Kahului on Hawaiian Airlines, and the resurgence of Island Air saying they are helping to add air seats in the state.
In the retailing sector, Suyderhoud said the foot traffic at the Queen Kaʻahumanu Shopping Center was up with revenues increasing 3 to 4 % this year. He also said the new Target at Puʻunēnē, Foodland at Kehalani, and Safeway in Wailuku, “signal investor and developer confidence in the future of Maui retailing.”
In commercial development, Suyderhoud said new commercial spaces are meeting an important need for businesses who want their own property. Spaces on the market include the initial increment of 70 acres at the A&B Maui Business Park, and the Maui Lani lots and Village Center on the mauka side of the property.
Suyderhoud also said sugar and the operation of Hawaiian Commercial and Sugar Company remain an “important component to the Maui economy,” serving as one of the economic drivers other than tourism that is contributing to the economy. He said the passage of the US national farm bill has reduced some uncertainties faced by the company, “yet it remains a vulnerable part of Maui’s economy.”
As for real estate, there was a decline in foreclosures and short sales. Suyderhoud said the Realtors Association of Maui reported that this area saw an improvement from 45% of all transactions in 2011 to less than 15% of transactions in 2014. “This cannot but help firm up an already robust market,” he said.